TD Ameritrade CEO: Just 30% of Referrals Sign up with FAs

June 12, 2018

TD Ameritrade is filling an “advice gap” with its new managed account offering rolled out earlier this month, CEO Tim Hockey tells Wealth Management. After all, out of all the referrals his company makes to RIAs, only 30% of TD Ameritrade’s clients actually hire an independent financial advisor, he tells the web publication.

Nonetheless, the company’s Personalized Portfolios service, which lets TD Ameritrade clients with at least $250,000 work directly with the company’s financial consultants to create goals-based investment portfolios, isn’t designed to compete with independent advisors who custody on its institutional platform, Hockey told Wealth Management at the company’s recent conference in Colorado Springs, Colo.

More than 6,000 independent financial advisors are currently on the platform, according to the publication. Such advisors have plenty of room to deliver value to clients who require tailored investment management, Hockey says, according to Wealth Management.

“Technology is taking up more of the low-end clients,” he tells the web publication. “The robo is part of that, Personalized Portfolios is another segment.”

Hockey believes the relationship between independent advisors and custodians will continue to be mutually beneficial. Custodians use the clients' cash-based fees as a revenue source that then translates to more services for advisors that they couldn’t offer alone, according to Hockey, the web publication writes.

TD Ameritrade is now working on improving analytics and incorporating machine learning and artificial intelligence, according to Wealth Management.

“The advisors say that is fantastic,” he tells the web publication. “Whether or not they will pay for it, that’s different.”